After turning in what will likely be its best performance since 2005, the economy is expected to slow next year. Many economists forecast a recession as early as late 2019 or sometime in 2020. That’s a big reason the stock market has plunged from its September 20 peak before mounting a post-Christmas rally.

The Trump Administration’s trade war with China, Federal Reserve interest rate hikes and the fading effects of federal tax cuts and spending increases are among the headwinds that are expected to cut growth from a projected 3 percent in 2018 to about 2.5 percent next year.

Here are the main obstacles the economy will face in 2019.

Interest rate hikes

After lifting its key short-term interest rate nine times since late 2015, the Fed recently signaled two more hikes next year amid a slightly dimmer outlook, down from three in its prior forecast. That would bring the rate to about 2.9 percent by late 2019, up from near zero for years after the Great Recession and financial crisis.

The central bank is gradually nudging rates higher to head off an eventual spike in inflation. But the increases are pushing up borrowing costs on credit cards, home equity lines, adjustable-rate mortgages and auto loans. Fixed-rate mortgages also have been affected, though less directly.

Since the increases take time to ripple through the economy, their cumulative effect will crimp growth next year, says economist Paul Ashworth of Capital Economics.

Trade war

Trump has slapped tariffs on $250 billion in Chinese imports while China has responded with duties on U.S. exports to that country. A 90-day truce has delayed a scheduled increase on most of the U.S. tariffs, but many economists don’t expect a quick resolution.

Economist Gregory Daco of Oxford Economics thinks the standoff will shave two-tenths of a percentage point off growth next year. Michael Feroli of JPMorgan Chase thinks Trump will eventually impose tariffs on the remaining $267 billion in Chinese shipments, trimming growth by slightly more.

Slowing business investment

Business spending on things like new factories and computers was a big part of the economy’s success in 2018. Trump promised the tax cuts would juice investment, and they seemed to provide at least a modest bump the first half of the year as firms could write off purchases more quickly.

But business investment slowed markedly in the third quarter and some economists believe most companies intent on taking advantage of the favorable tax treatment have done so.

Meanwhile, businesses will face other hurdles to brisker spending, Feroli says. Stronger wage growth will boost consumers but squeeze corporate profit margins. Lower oil prices will mean less drilling and related purchases. And higher interest rates will increase the cost of business loans. The economists surveyed predict investment growth will slow from 6.8 percent this year to 4.3 percent in 2019.

Fading federal stimulus

The same can be said for the federal government’s $1.5 trillion tax cut and spending increases of $320 billion over two years. While the stimulus will rev up the first half of 2019, it will peter out quickly in the second half, analysts say. After adding seven-tenths of a percentage point to growth this year, the package will add a half a percentage point in 2019, Daco says.